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 Technology News | February 2006 
Mexico Meets Silicon Valley
 Kerry A. Dolan - Forbes.com
For most people, Mexico doesn't equate with a home for high-tech companies. But two-dozen software, hardware and life science companies from Mexico had a coming-out party of sorts in Silicon Valley this week.
There really is something to celebrate, even if it is still small. Mexico's tech industry has total revenue of just $3 billion a year from information technology and software firms, but already some of these companies can boast about such customers as Hewlett-Packard, General Electric and Texas Instruments.
The Mexican tech companies showcased their products and services at a gathering at the Computer History Museum in Mountain View, Calif., hosted by angel group Silicom Ventures and the Mexico-Silicon Valley Technology Business Accelerator, known as TechBA, a program created by the Mexican Ministry of Economy in early 2005. The ministry granted $6 million last year to TechBA programs in San Jose, Calif., and Austin, Texas, where Mexican tech companies learn things like how to operate within the U.S. legal and financial system and how to hone a pitch to venture capitalists when raising money.
The initial success came in July 2003, when Mexican Web-application developer JackBe raised $6.5 million from Intel Capital, Intel's strategic investment program. This was the first Mexican company to raise U.S. venture capital, says Jorge Zavala, chief executive of TechBA. Zavala hopes this is just the start, and it may be.
After Alberto Herrera, chief executive of fledgling wireless-sensor network company Medida, pitched his firm to a panel of four top-tier Silicon Valley venture capitalists--in front of a standing-room-only crowd of some 350 people - Josh Stein of venture capital firm Draper Fisher Jurvetson was so impressed that he asked Herrera to set up a meeting. Since it was founded 18 months ago, Medida has deployed its technology in a fishing videogame launched by Japanese company XaviX at the recent Consumer Electronics Show in Las Vegas. Microsoft Chairman Bill Gates was so interested in the technology that he spent 15 minutes at their booth, Herrera said, beaming.
Other promising companies at the showcase included Softtek, Mexico's largest software company, with $146 million in revenue last year. Softtek positions itself as the "near-shore" answer to India's offshore information-technology service providers, more convenient than India because Mexico is within U.S. time zones and is a much shorter flight than to India. It has operations in ten countries in North America, Latin America and Europe. Customers include GE, Hewlett-Packard and Citigroup.
"Our aim is to be the first Mexican IT company listed on Nasdaq," Softtek Vice President of Business Development Melik Hernandez told the crowd.
Some Mexican firms are hoping to join the booming life-sciences industry in the U.S. Medical device maker Innovamedica has a product in development called a ventricular assistive device - used to keep patients alive during heart surgery - that is undergoing animal trials at the Texas Heart Institute. Innovamedica is also co-developing with Tyco Healthcare, a unit of conglomerate Tyco International, a device called a gastric mucosa impedance spectrometer, used to monitor patients in the intensive care unit for signs of organ failure after surgery. Innovamedica Chief Marketing Officer José Urrusti says his company's device is more specific and less expensive than existing options.
To be sure, all these companies face plenty of competition, both in the U.S. and elsewhere. Other countries, including South Korea and Singapore, have technology accelerators or incubators in Silicon Valley and have had them for far longer. TechBA opened its accelerator just 11 months ago in San Jose. But the Mexicans are optimistic. And the technology accelerator program is likely to stay in place even after Mexico elects a new president in July, says Bruno Figueroa, consul general of Mexico in San Jose. |
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